Sony to step away from personal computer market

THIRTY years ago, it was the technology that would transform the world.

Businesses and individuals alike yearned to own a personal computer (PC), on which they could store documents, pictures, games and programs.

But now technology giant Sony has announced it is to step away from the personal computer market to focus on small-scale tablets and smartphones amid what it called “drastic” changes in the industry.

Experts warn the move could spell the beginning of the end for the personal computer industry, which has been eclipsed by tablet devices such as the iPad that use “cloud” computing.

In a statement to the stock exchange yesterday, the Japanese electronics giant said it is to dispose of its loss-making PC business, which trades under the Vaio brand, as part of a shake-up which will also see it shed 5,000 jobs worldwide.

It is also seeking to return its TV arm to profit by concentrating on sales of high-end models.

Regarded as a premium PC brand, Sony has been challenged by competition from Samsung and Apple in terms of pricier PCs, while Chinese competitors such as Lenovo are taking over the cheap end of the market.

Ian Sommerville, professor of computer science at the University of St Andrews, said other manufacturers were likely to follow Sony’s lead in ditching their PC arms.

He added: “I think it is inevitable that there will end up being just two or three PC manufacturers. They are going out as people opt for laptops and tablets, especially at home. However, while in ten years, the number of desktop computers will be less than it is now, I do not think it will be zero.”

Sony launched its first 8-bit personal computer, the SMC-70, featuring BASIC computer language and 3.5-inch floppy drive, in 1982. More recently it has developed slimline “notebook” Vaio devices. It aims to sell Vaio to Japan Industrial Partners (JIP) by the end of next month.

The company said: “Following a comprehensive analysis of factors, including the drastic changes in the global PC industry … the company has determined that concentrating its mobile product line-up on smartphones and tablets and transferring its PC business to a new company established by JIP is the optimal solution.

“As part of the business transfer to JIP, Sony will cease planning, design and development of PC products. Manufacturing and sales will also be discontinued after the spring 2014 line-up to be launched globally.”

Sony has identified its camera, PlayStation and Xperia smartphone divisions as the three core businesses to drive growth in electronics. The move came as the company predicted a £665 million loss for the current financial year, after a £260m profit in the year ending March 2013.

But there was a £163m profit for the third quarter, helped by improved sales of smartphones and the PlayStation 4 launch.

The company said it would cut its global workforce by around three per cent by the end of March next year, with 1,500 job losses in Japan and 3,500 overseas.